McDermott’s German Tax Litigation Team Secures Victory Before The European Court Of Justice

Overview


International law firm McDermott Will & Emery has secured a favourable judgement in the European Court of Justice (ECJ) on the value added tax (VAT) exemption of medical treatment services provided via telephone. The judgment is based on a request in a preliminary ruling by the German Federal Fiscal Court. McDermott represented the claimant X GmbH vs. Revenue Office Z, C-48/19.

“The ECJ’s answers to both questions are a positive result for our client. Although the German Federal Fiscal Court must now define the therapeutic objective and the quality standards of certain paramedical professionals, the services our client provides should be completely, or at least for the most part, VAT exempt, said Dr. Gero Burwitz, a McDermott partner.

“In this case, the ECJ had to address two questions: 1) whether medical advice services provided via telephone can, in principle, be covered by the VAT exemption and 2) whether the provision of the advice by nurses and medical assistants qualifies for the VAT exemption. With regard to the first question, the ECJ stated that the location of services rendered is not relevant for the VAT exemption of medical treatment, which means that medical treatment provided via telephone can be exempt. The court stated that the decisive factor is that the service pursues a therapeutic objective, laying down a legal framework. Further, the ECJ rephrased the second question, interpreting it to mean whether nurses and medical assistants providing medical treatment must meet additional professional requirements simply because the services are provided via telephone. Member States would have the discretion to define the medical and paramedical professions eligible for exemption, however, must ensure that a sufficient level of quality is thereby achieved regardless of how services are rendered.

This is important because the principals for those services are health insurances, which are not entitled to deduct input VAT. The verdict of the ECJ may also lead to other forms of communication (e.g. telemedicine services and medical advice applications) being treated as VAT exempt,” he added.

McDermott’s Munich-based team was led by Dr. Gero Burwitz and included Jonathan Storz.

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